Why You Should Start Reading Up About Cryptocurrency?
What is Cryptocurrency?
Cryptocurrency put simply, is a digital currency created through the conversion of information and data (encryption) into a code which signifies a specific unit of currency.
Cryptocurrency came about during the invention of the digital cash — Bitcoin — by Satoshi Nakamoto. The key factor in the success of bitcoin is its decentralised nature, which means that the cryptocurrency transacts without a central authority like a bank to keep records of the transactions and balances. Instead, it runs on a peer to peer electronic cash system just like file sharing. After the request for transaction from one party to another has been validated, this verified transaction is added on to the chain of other transactions before that, creating a new block of data. Once this block of data has been added to the existing blockchain, it is set in stone and cannot be altered. Cryptocurrency is the type of exchange, the monetary unit used in the this whole process.
Different types of cryptocurrency
There are thousands of Cryptocurrencies on the market, the pioneer being Bitcoin in which its technology led to the creation of different cryptocurrencies such as Ethereum, Litecoin, Ripple, Monero and much more. Each currency can also be used for different functions, for example, Monero is even more anonymous in its transaction than Bitcoin and has been popular in many darknet markets.
Why should I care about crypto currency?
Cryptocurrency, runs unaffected by political influence. It does not fluctuate from geo political factors and thus, more people especially in Asia are buying cryptocurrencies like bitcoin to protect themselves from possible devaluations in their national currency which might lead to a loss of profit.
Permanence. The irreversible nature of cryptocurrency means that there is no way to alter data or falsify information. Allowing for a transparent record of financial transaction.
Nearly instantaneous. Financial transactions are made almost immediately and verified in a few minutes and this technology is only going to improve from here on. Cryptocurrencies transcend national boundaries and takes place in a global network of computers.
Limited supply. There is a limit to the supply of tokens in most cryptocurrencies and therefore, there is a known and absolute number. This also means that there will be relative stability as there will not be market manipulation causing inflation or deflation.
Democracy. Anyone can use cryptocurrency. Since there is no central system running it, anyone can download the software for free to own the currency. There is no discrimination on who is allowed or not allowed to own it. It is truly a new kind of empowerment to the common man. The fact that it stands unaffected by geopolitical factors means that central systems and the government lose the power to manipulate or control monetary transactions. There is no restriction on who can or cannot use cryptocurrency. Being irreversible also means you cannot stop someone from accepting payment or reverse a transaction.
These are just a few refreshing introduced to the world when cryptocurrencies came about. Despite all the noise around it, it is no doubt that cryptocurrency is a revolutionary way of financial transactions. To some, it might be difficult to imagine digital money as a normalised model in the long run, but think about all the technology we possess now that we think is normal. Either ways, we cannot deny cryptocurrency’s growing popularity.
